PSU banks, select private banks and oil marketing companies gained while technology and infra stocks were in the red.

It was a consolidation day for the market on Tuesday after nearly 2 percent rally in the previous session, following sluggish global cues ahead of US inflation data due later today.

The market was steady with mild gains after the fall in February CPI inflation and better-than-expected January industrial output, but suddenly in last couple of hours of trade it wiped out all gains to turn volatile, before closing on a mixed note. PSU banks, select private banks and oil marketing companies gained while technology and infra stocks ended in the red.

Meanwhile, the consumer price index (CPI) inflation on Monday slipped to a four-month low of 4.44 percent in February, compared with 5.07 percent in January 2018 and industrial production maintained growth for the third consecutive month at 7.5 percent in January against 7.1 percent in previous month.

"The lower-than-expected CPI inflation and higher-than-expected IIP data are likely to allay fears of an interest rate hike by the Reserve Bank of India in its next policy meeting scheduled in the first week of April," Anand Shah, Deputy CEO & Head of Investments BNP Paribas Mutual Fund said.

Nifty PSU Bank index trimmed gains to 2 percent from 5 percent due to correction in SBI that lost 3 percent from day's high to end half percent higher.

TCS shares posted the biggest single day fall in percentage terms in over last three years, falling 5 percent after promoter Tata Sons sold around 1.5 percent stake in the IT major through block deals in opening. The Nifty IT index was down 1.5 percent.

Future Consumer rallied 19 percent. Motilal Oswal initiated coverage with Buy rating and set a target price of Rs 76, implying around 50 percent upside as it is the best play on the huge window of opportunity for brands using modern retail methods of distribution.

On the global front, global markets were mixed as investors look forward to the release of US inflation data later in the day. Nikkei gained 0.66 percent while Shanghai and ASX 200 fell 0.4 percent each.

The S&P BSE Sensex recouped losses after falling nearly 200 points in the last one hour of trade after Newswire reports suggested that the govt. has requested for the withdrawal of Budget proposal on LTCG tax on shares.

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LTCG decision to be reflected in the official Amendment, if any to the Finance Bill, said the reports. However, the index soon reversed gains after govt official told CNBC that there is no rethink on LTCG.

The S&P BSE Sensex closed below its crucial psychological support of 34000. The index slipped 61 points lower or 0.18 percent at 33,856.

The Nifty50 closed above its 100-DEMA at 10,426, up 5.45 points or 0.05 percent.

Top losers include names like TCS which fell over 5 percent, followed by Kotak Mahindra Bank, HCL Technologies, NTPC, Coal India, Ambuja Cements, and Hindalco Industries.

Stocks in News:

TCS shares fell 5.4 percent after the large block deal trade. Tata Sons, the promoter of major operating companies of the Tata group, was planning to raise around Rs 8,200 crore by selling a stake in the IT major, according to investment banking sources.

The State Bank of India reduced its charges on non-maintenance of an average monthly balance (AMB) in a savings account by up to 75 percent, effective April 1. The stock closed 0.7 percent higher at Rs254.70.

Future Consumer shares rallied nearly 20 percent after brokerage house Motilal Oswal said FCL was the best play on the huge window of opportunity for brands using modern retail methods of distribution. The stock closed 19.4% higher at Rs60.10.

India's monsoon rains are expected to be slightly below normal this year, while parts of Australia's eastern grain belt could be drier as an El Nino weather pattern may develop in the second half of 2018, a private US-based weather forecaster said.

The impasse in the Lok Sabha continued for the seventh day with no let up in protests by members from opposition parties and TDP over issues like bank scams and special status demand for Andhra Pradesh, forcing the Speaker to adjourn the House.

Global Cues:

Asian markets ended mixed as investors look forward to the release of US inflation data later in the day. Nikkei gained 0.66 percent while Shanghai and ASX 200 fell 0.4 percent each.

European stocks were mildly higher as investors monitored corporate earnings and awaited the release of US inflation data later in the day.